Margin and Markup Calculator
Convert between unit cost, selling price, gross margin and markup.
Result
Selling price per unit: $75.00
This is gross unit economics, not net profit. Include every per-unit expense you intend cost to cover; fixed costs belong in the break-even calculator.
- Gross profit per unit
- $25.00
- Gross margin
- 33.3%
- Markup on cost
- 50%
- Total revenue
- $7,500.00
- Total cost
- $5,000.00
- Total gross profit
- $2,500.00
https://calcgallery.com/business-investing/margin-markup-calculator/
Results are arithmetic estimates based on the assumptions you enter, not accounting, tax, investment or lending advice. Forecasts can be wrong and important decisions should be checked with a qualified adviser. Read the full disclaimer
How to use the Margin and Markup Calculator
- Choose whether you know the price, target margin or target markup.
- Enter unit cost and the selected price or percentage.
- Enter a quantity to extend the per-unit result into revenue, cost and gross profit totals.
Two percentages for the same gross profit
Margin and markup both start with selling price minus unit cost. They differ because they compare that gross profit with different numbers.
gross profit per unit = selling price − unit costgross margin = gross profit ÷ selling pricemarkup = gross profit ÷ unit costAt a cost of 50 and price of 75, gross profit is 25. Margin is 25 divided by 75, or 33.333%. Markup is 25 divided by 50, or 50%. Treating those percentages as interchangeable is a common pricing error.
Working backward from a target
For a target margin, price is cost divided by one minus the margin. A 40% margin therefore requires price to leave 40% of revenue after unit cost. For target markup, price is cost multiplied by one plus the markup.
The totals multiply those unit figures by quantity. They remain gross figures: rent, salaries, insurance, financing, tax, returns and discounts are absent unless already included in the cost you entered. Use break-even to add fixed costs and determine the required sales volume.
With your numbers
- Gross profit per unit = $75.00 − $50.00 = $25.00
- Margin uses selling price: $25.00 ÷ $75.00 = 33.333%
- Markup uses cost: $25.00 ÷ $50.00 = 50%
Quick reference
This is gross unit economics, not net profit. Include every per-unit expense you intend cost to cover; fixed costs belong in the break-even calculator.
| Example | Selling price per unit |
|---|---|
| 50 cost and 75 price | $75.00 |
| 25 cost and 40% target margin | $41.67 |
| 80 cost and 25% target markup | $100.00 |
| Selling below cost | €90.00 |
| 12 cost and 60% target margin | €30.00 |
| 10 cost and 100% target markup | €20.00 |
Common questions about the Margin and Markup Calculator
- Why are margin and markup different?
- They use different denominators. Margin divides gross profit by selling price; markup divides the same profit by cost.
- Is gross margin the same as net profit margin?
- No. Gross margin includes only the costs represented by unit cost. Fixed expenses, tax and other operating costs are not included.
- Can the calculator show a loss?
- Yes, in cost-and-price mode. A selling price below unit cost produces negative gross profit, margin and markup.